Overcoming Barriers to Electrical Energy Storage

Francisco Castellano Ruz and Michael Pollitt

Competition and Regulation in Network Industries, 2016, vol. 17, issue 2, 123-149

Abstract: Multiple market drivers suggest that electrical energy storage (EES) systems are going to be essential for future power systems within the next decade. However, the deployment of the technology is proceeding at very different rates around the world. Whereas the sector is progressing quickly in California, it is not gaining much traction, so far, in Europe. This research aims to examine the prospects for viable business models of EES to emerge, by focusing on the value proposition, value creation and value capture aspects of the technology. The market and regulatory framework in California and Europe are analyzed critically, and changes to overcome the main barriers are recommended. The research shows that the main barriers to viable business models are: inadequate definition and classification of EES in legislation; lack of markets for some ancillary services; inadequate market design that benefits traditional technologies; and the lack of need for EES in some jurisdictions. The prospects are better in California because regulation is more advanced and favorable for the technology, and regulators are collaborating with developers and utilities to analyze barriers and solutions for the technology. In Europe, there is a need to study more deeply the necessity of EES, to clarify the definition of EES, create new markets for ancillary services and design technology-neutral market rules.

Keywords: electrical energy storage; battery; market design (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:crnind:v:17:y:2016:i:2:p:123-149

DOI: 10.1177/178359171601700202

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